In this chapter, we evaluated shares of common equity in Starbucks using the value-to-book approach, market multiples, and reverse engineering. The Coca-Cola Company competes directly with Starbucks. The data in Chapter 12, Exhibits 12.14 through 12.16, include the actual amounts for 2015 and projected amounts for Year +1 to Year +6 for the income statements, balance sheets, and statements of cash flows for Coca-Cola. In Problem 14.21, you evaluated shares of common equity in Coca-Cola using the value-to-book approach, market multiples, and reverse engineering.

REQUIREDa. Prepare an exhibit using the data and analyses for Starbucks from this chapter and the data and analyses for Coca-Cola from the previous problem that will allow you to compare these two competitors on the following dimensions:1. Cost of equity capital (RE)2. ROCE for 20153. Projected ROCE for Year +14. Book value of common shareholders' equity5. Market value of common shareholders' equity

6. Intrinsic value of common shareholders' equity7. Value-to-book ratio8. Market-to-book ratio9. Value-earnings ratio (using Year +1 projected comprehensive income)10. Price-earnings ratio (using Year +1 projected comprehensive income)11. Value-earnings ratio (using 2015 reported earnings per share)?

12. Price-earnings ratio (using 2015 reported earnings per share)?

13. Reverse engineer share price to solve for implied expected rate of return (assuming 3% long-run growth)?

14. Reverse engineer share price to solve for implied long-run growth (assuming the cost of equity capital as the discount rate)b. What inferences can you draw from these comparisons about the valuation of Starbucks versus Coca-Cola? In the chapter, we concluded that Starbucks shares were under priced by roughly 16% in the market at the end of 2015. In the previous problem, you determined whether Coca-Cola was under- or overpriced. Are the comparisons here consistent with your previous conclusions regarding both Starbucks and Coca-Cola shares at the end of 2015? Explain.

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Ex hibit 12.14 The Coca-Cola Company Income Statements for 2015 (Actual) and Year +1 through Year +6 Projected) (amounts in millions; allow for round ing) (Problem 12.16) Actual Fomcasts 2015 Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 INCOME STATEMENT $ 45,623 (18,02 1) $ 46,992 (18,562) $ 51,349 (20,283) $ 31,066 (18,999) (1,540) 10,527 Re venues $44,294 $48 A01 (19,118) $49,853 (19692) $52889 (20,891) Cost of goods sold Gross Profit (17482) $26,812 $ 27,602 $ 28,430 (17,387) (1,410) $29283 (17,908) (1,452) $30,161 $31998 Selling geneal, and administrative expenses Other operating expenses Operating Pofit (16427) (1657) $ 8,728 (16880) (1369) (18446) (1496) $10,220 (19,569) (1,587) $ 9,353 $ 9,922 $10842 9,633 Interest income 613 606 623 642 661 681 701 Interest expense (856) (887) (910) (951) (993) (1,034) (1,065) 790 Income from equity affilates Other gains (losses) Income before Tax 489 631 663 696 731 767 631 $ 9,605 $ 9,702 (23 29) $ 7,374 $10309 $10,619 (2,549) $ 8071 $ 10,940 (2,626) 10,009 $11269 Income tax expense Net Income (2239) $ 7,366 (2,402) $ 7,607 (2,474) $ 7,835 (2,704) $ 8564 8,315 Net income attrbutable to noncontrolling interests (15) (32) (32) (32) (32) (32) (32) Net Income attributable to common $ 7,351 $ 7,342 $ 7,575 $ 7,803 $ 8,039 $ 8,283 $ 8532 shareholders Other comprehensive income items Comprhensive Income (4,412) $ 2,954 $ 7,342 $ 7,575 $ 7,803 8,039 8,283 $ 8,532